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March 10, 2008 December 12, 2011 Mounds View Business Toolbox Internal Document Page 7 of 10 project cost. The participating lender normally finances at least 50% of the cost. The borrower typically puts down as little as 10% of the total project cost. For more information, call SPEDCO at 651-631-4900. SBA 7(a) Loan Program The 7(a) program includes financial help for businesses with special requirements. For example, funds are available for loans to businesses that handle exports to foreign countries, businesses that operate in rural areas and for other very specific purposes. SPEDCO offers loan packaging consulting services to banks and their customers for the 7(a) program. The SBA 504 Loan program provides fixed-rate, long-term financing for land, buildings and manufacturing equipment or machinery. SBA 504 Loans feature a 10 to 20 amortization, fixed-loan payments, below market interest rates, and a low downpayment. The deal structure is 50% bank loan (1st position), 40% SBA 504 (2nd position), and 10% equity injection. (A new business and a special purposed building require 20% equity injection.) The program’s minimum and maximum loan amounts are $50,000 and $750,000 respectively. How does the program work? Businesses should contact the certified development company authorized by SBA to originate and service SBA 504 loans in their geographic area. SPEDCO is a non-profit certified development company located in New Brighton whose mission is to help small businesses obtain financing for job creation, to fund business expansion and to promote economic development in Minnesota. SPEDCO can handle SBA Loan financing for businesses wishing to expand or locate in Mounds View. They provide long-term, fixed rate loans through the SBA 504 Loan program and also provide 7(a) loan packaging consulting services to banks and their customers. For more information call 651-631-4900. 2) State of Minnesota Business Financing Programs The Department of Employment and Economic Development encourages the creation of high quality jobs through business growth, expansion and retention. Business Development Services help companies expand or relocate in Minnesota, find and train employees, promote international trade and finance business expansions. The most likely funding program applicable to Mounds View businesses would be the Minnesota Investment Fund (MIF). It’s designed for businesses acquiring “fixed assets” (such as equipment, buildings, and land) and adding new employees as a result. This program provides companies below-market financing. Virtually all types of businesses are eligible, except retail. The maximum award is $500,000. The applicant is the city. Terms are negotiated. 3) Ramsey County Business Loan Program The Ramsey County Business Loan Program provides gap financing that can be used in conjunction with other private and public funds.